As a strike looms, CAW offers concessions to Detroit 3

Allison Martell, Nicole Mordant

4 Min Read

TORONTO/VANCOUVER (Reuters) - Four days before its strike deadline, the Canadian Auto Workers union has offered the three Detroit automakers concessions on wages and pensions for new hires, yielding ground that should not upset existing workers.

CAW National Secretary-Treasurer Peter Kennedy said the union has proposed a lower starting wage for new hires, and a longer “earn-in,” the time it takes to reach the top of the pay scale.

The union has also presented a new pension proposal for new hires at Chrysler FIA.MI, Ford Motor Co (F.N) and General Motors Co (GM.N). New workers would contribute to their pensions - current employees do not - but would still be entitled to a defined-benefit, not a defined-contribution pension.

Also on pensions, Kennedy said the union could relax the “30-and-out” provision for new hires. Instead of being allowed to retire after 30 years with full pension under any circumstances, they would be able to retire after 30 years only if they were above a set age.

Tony Faria, a University of Windsor professor and auto industry expert, said he was not surprised that the CAW had chosen to make concessions on new-employee pay and benefits.

“I thought that was an area where the CAW certainly could do something, as with the new hire they are not taking anything away from the existing worker, who has to vote on ratifying the contract.”

Faria said he was glad the CAW had put the concessions on the table. If it hadn’t “there was no hope for this contract being settled,” he said.

Earlier on Thursday, CAW President Ken Lewenza said in an interview that the talks with the Detroit Three were “terrible”. But he added that “the world could change in four days”.

Under the starting wage concession, new workers would still reach the same pay level as existing employees eventually. The CAW has refused to consider a permanent two-tier wage system, arguing that employees doing the same work should eventually be paid the same amount.

“The important thing is that over time they would grow into the prevailing rate, so that we wouldn’t have a permanent two-tier system,” Kennedy said.

On Monday, a union source close to the talks said it might be possible to extend the earn-in from the current six years to as long as 10 years. Kennedy said he did not want to talk specifics.

The CAW has threatened an unprecedented simultaneous strike at all three automakers if it does not reach a contract agreement with at least one company by the union’s strike deadline of 11:59 p.m. eastern time on September 17 (0359 GMT, September 18).

“We continue to have an open and constructive dialogue with our CAW partners,” GM spokeswoman Faye Roberts said in an email.

“We are optimistic that we can continue to work together to overcome challenges, find creative solutions and improve our competitive position.”

A Chrysler spokeswoman declined to comment on the developments, and Ford did not respond to a request for comment.

The automakers want the CAW to accept the same type of deals they reached in the United States last year with the United Auto Workers, Lewenza said last week.

The UAW contracts had no wage increases and preserved a two-tier system. They also included signing bonuses and profit-sharing. The latter has not been offered to the CAW, Lewenza said.

With talks heading down to the wire, Kennedy said senior officials from Chrysler and Ford would join the negotiations on Thursday. He said GM already has a senior U.S. official at the table.

“It’s a sign that folks are taking this seriously,” Kennedy said. “There’s a lot of experience around all of the bargaining tables and if we can get behind the concepts we can get this done.”